Venezuela Says Oil Glut a Political Strategy as OPEC Leaders Determine Next Step

During a Tuesday live broadcast, Venezuelan President Nicolas Maduro announced that the country’s heavy crude oil was selling for a six-year low of $37.95 a barrel and claimed outside forces would try driving the price to $20 before the December 6th parliamentary elections.

Santa Elena, October 29th, 2015 (venezuelanalysis.com) – During a Tuesday live broadcast, Venezuelan President Nicolas Maduro announced that the country’s heavy crude oil was selling for a six-year low of $37.95 a barrel and claimed outside forces would try driving the price to $20 before the December 6th parliamentary elections.

“With petroleum at $20 or $30 dollars on December 6th, we’re still going to smash the oligarchy and imperialist candidates of Venezuela,” Maduro boasted.

The statement was followed by announcements raising the salary of teachers and state oil company (PDVSA) workers by 30 percent, on top of the 30 percent minimum wage increase indicated earlier this month. The head of state also promised elderly pensioners a holiday bonus worth three minimum salaries, to be delivered in late November.

Last week, Venezuela called for a unique meeting of OPEC states and nonmember oil-producers like Russia to discuss strategies to defend oil prices, which sank from $110 to $45 in the past 16 months, with no forthcoming signs of recovery.

Venezuelan authorities have suggested oil nations coordinate to cut production in an attempt to drive prices up, or adopt a free-floating floor price based on the investment needed to sustain regular production, starting at around $88.

The meeting would be held before the traditional Organization of Petroleum Exporting Countries (OPEC) summit on Dec. 4th, though Persian Gulf members have shown reluctance to set a date.

Saudi Arabia is more concerned in maintaining market share than recovering prices, meaning the top-producing OPEC nation will not agree to a production cut.

As for Venezuela’s price floor idea, the Saudi Oil Minister Ali al-Naimi said Tuesday, “Let the market determine the price.”

While Kuwait and the United Arab Emirates have shown similar indifference, OPEC countries outside the Gulf such as Nigeria, Ecuador, Iran and Algeria have conveyed interest in the proposed strategies.

Still, the meeting remains in limbo as OPEC leaders probe non-aligned countries to see what probability of a coordinated effort there might be.

On Saturday, the Algerian Foreign Minister Ramtane Lamamra issued an open show of support for Venezuela’s bid, saying, ”Algeria has always been a pioneer when it comes to strengthening solidarity between producing countries.”

Still, the Minister added, “We would only convene a summit if its success is guaranteed; meetings at the level of ministers and experts will therefore precede such an event.”

While concluding Tuesday’s broadcast, President Maduro indicated he would be traveling to Saudi Arabia for the Summit of South American-Arab Countries next week.

The head of state swore he would seize the opportunity to “insist” on the strategic meeting between OPEC and non-OPEC states.

“It can’t be that we produce petroleum and speculators put the price on it,” he asserted, saying he was hopeful for a mutual understanding and adding “May God accompany us [on this trip].”

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